By Michael E. Miller
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By David Villano
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Badri began secreting cash and assets without Berezovsky's knowledge and funneling them to a lesser-known cousin, who would bring the wild-oligarch show to Miami and Fisher Island.
Built like a bulldog, with a bald, bulbous head, the short-tempered Kay had a habit of storming out of boardrooms in cursing fits. In recent court filings, he boasts of his own business savvy — taking credit for decades-old deals for shipments of Jeep Cherokees — and insists he has wealth beyond trickle-down assets from his cousin.
Kay's and Badri's fathers sold clothes together in Georgia, and the two cousins were extremely close as children. Kay immigrated to New York City at age 16. He drove cabs and then worked in Manhattan's diamond district, where merchants walked the streets with briefcases handcuffed to their wrists.
By 1985, Kay had his own business selling jewels and was making a profit of $2 to $3 million a year. He apparently dabbled in the Soviet black market, later testifying he had imported cigarettes and Chinese-made clothing to Russia.
Around 1990, Kay reunited with his long-lost cousin at London's President Hotel. They again became inseparable. Within a couple of years, Badri was giving Kay spare millions to stash in a secret New York bank account "to keep [the cash] away from Berezovsky," Kay would claim in a court filing.
Kay also contends he was a "silent partner" in some of Badri and Berezovsky's biggest acquisitions: the oil conglomerate, a television station, the world's largest aluminum company. The finances got muddy, though, when Berezovsky and Badri became fugitives.
After the resignation of Yeltsin in 1999, Berezovsky funneled corporate money and closed-door sway into helping steer former KGB spy Vladimir Putin into the president's seat. Within a year, the puppet politician — a black belt in judo who shoots whales with crossbows — bared his teeth. He threatened to prosecute Russia's oligarchs.
Under investigation for economic espionage and money laundering, Berezovsky fled to London, where he continues to plot Putin's political demise. Badri moved back to Georgia, where he became a Robin Hood figure by pulling stunts such as paying the gas bill for the entire capital city of Tbilisi in 2001.
But Badri was worried his wealth might be seized, so he transferred more assets and trusts to Kay. Hugely valuable agreements were documented in an incredibly casual manner. One scrap of paper, for instance, has come to be referred to as "the $300 million document" in Georgian court. Purportedly signed by Badri, it declares that Kay's "participation in [their] business activities would not be officially formalized due to various reasons" and then adds that the younger cousin is owed $300 million "upon his request."
"We were cousins and had a close relationship," Kay explained in court. "Badri trusted me, and I trusted Badri."
The loose, labyrinthine partnerships were "distinctly Russian," Zeltser says. "They invested together for fun. A will itself is a crazy concept in Russia." (Berezovsky and others have challenged the authenticity of many documents in courts throughout Europe and the United States.)
In 2004, Kay traveled to Florida to find a retirement home for his parents. He struck out until the last day of the trip, when some associates took him to a sprawling, elegant island just off South Beach.
White condo towers with red-tiled roofs reminded him of his travels to Spain. Peacocks strutted a golf course and parrots flew by as Kay bounced around green hills in a golf cart.
In a later court affidavit, Kay recalled turning to a companion and asking "jokingly whether [he] could buy the whole island. He said it might be possible, and within a year, the deal for the acquisition was done."
Fisher Island is a storied hideaway. It was once owned by the Vanderbilts and has been a vacation home to A-listers such as Oprah Winfrey and Julia Roberts. In 2007 and 2008, Forbes named it America's most expensive zip code, with average homes selling for $3.85 million. Bolstering its prestige — but also the notion that it's an Alcatraz for status-obsessed rich people — is the fact that it can be reached only by boat or helicopter, and with an invitation.
The island's sale to a European investment group in 2005 made a splash in South Florida. According to his court testimony, Kay bought the property with a $27 million down payment and a $79 million loan.
Zeltser remembers it as a bargain of Soviet proportions. "We just recently had it appraised at $700 million," says the lawyer, adding of the former owner, Blockbuster cofounder John Melk: "The old man wanted to sell, and there aren't too many buyers who can pay cash."
The Russians had gaudy plans. They held a lavish party in 2005 for Spanish Vogue magazine at the country club, bringing hundreds of outsiders onto the grounds where a membership goes for more than $175,000. And the investment group announced it would build 47 condos, some of them as large as 25,000 square feet, surrounded by waterfalls, fountains, and a manmade lagoon. Kay himself moved into a $4.4 million mansion — owned by Fisher Island Holdings, of which he was president — overlooking the golf course.